‘Things Are So Much Worse’ – but Does Anyone Care About the Deficit?

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As we told you yesterday, the Congressional Budget Office estimated this week that the deficit for the first 11 months of fiscal 2018 totaled $895 billion, or $222 billion more than it was over the same period in 2017. The deficit for the full year is likely to be lower, since the government usually runs a surplus in September; CBO said the final numbers for 2018 are still likely to be consistent with its previous projections, which estimated a fiscal 2018 budget gap of $793 billion. That would put the full-year increase at about 18 percent — and still leave the deficit on track to approach $1 trillion by the end of fiscal 2019 and surpass that mark by 2020.

And, as The Washington Post’s Damian Paletta and Erica Werner note, the current Republican and Democratic agenda suggests that the borrowing binge is far from over: “Leading House Republicans proposed an additional $646 billion in tax cuts this week — a number that could grow to roughly $2 trillion over a decade — and a growing number of prominent Democrats have proposed expanding access to government-sponsored health care, which could add trillions more.” The Committee for a Responsible Federal Budget projects that the GOP’s proposed second round of tax cuts will add $5 trillion to the national debt over the next 20 years.

The CBO’s deficit numbers generated plenty of reaction. Some highlights:

Maya MacGuineas, president of the Committee for a Responsible Federal Budget: “It is amazing that things are so much worse and yet people care so much less.”

John Kasich, former Ohio Governor and GOP presidential candidate: “The nonpartisan CBO just released new data showing massive increases in the deficit. This is happening because Republicans have forgotten their duty to fiscal responsibility. We have a golden opportunity right now, and we’re throwing it away.”

New York Times columnist Paul Krugman: “I keep on seeing commentary marveling at how Republicans have abandoned fiscal responsibility thanks to Trump. But the real marvel is that anyone ever believed their claims to care about deficits. E.g., Paul Ryan was always an obvious fraud.”

Former congressman John Tanner (D-TN): “The problem with the national debt is that a day of reckoning is inevitable, but it’s not imminent as far as anybody knows. And so our political system — from my experience — deals more with problems that are imminent than it does with problems that are inevitable sometime in the future.”

Rep. Adam Schiff (D-CA): “We knew tax cuts for the wealthy would explode the deficit. And now they have. Still, Trump & Ryan argue for massive cuts to Medicare & Social Security, saying we don’t have the money. Not a chance.”

Budget expert Stan Collender: “Keep in mind that this doesn’t include spending for a space force, an infrastructure plan or a wall between the United States and Mexico. It also doesn’t include the projected $200 billion a year revenue loss from the new GOP tax bill the House will debate before the election or the additional spending that will be needed because of Hurricane Florence. And it certainly doesn’t include the lower revenues and higher spending that will happen if the economy slows below current expectations. A combination of these things could easily cause the U.S. deficit to approach $2 trillion annually.”

MSNBC’s Steve Benen: "[T]here are a few key angles to this to keep in mind. The first is that Donald Trump’s campaign assurances about balancing the budget and eliminating the national debt should be near the top of the list of his broken promises. Second, it’s now painfully obvious that the Republican Party, which spent the Obama era pretending to care deeply about fiscal responsibility and the terrible burdens deficits place on future generations, operated in bad faith. And third, every Republican who said the GOP tax breaks for the wealthy would pay for themselves ought to face some renewed questioning about how very wrong they were.”

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.